Workout of the Day

Nov 12

The Thing About Failure Rates

The thing about failure rates is that they don’t account for input. They consider one variable: was it a success or failure? Failure rates also tend to be rather high. The restaurant business, for example, is known for its dismal failure rates. Statistics will tell us that 60% of restaurants will close within the first year; within the first 4 years, that number rises to 80%+. What these statistics don’t tell us, though, is what preparation was behind those 80% of failures. They don’t tell us what the capital behind the business was, how much research the restaurant owner did on location, market sentiment, and branding, or how they adapted and innovated. In short, failure rates tell us nothing about the input, and throw out a number (the “output”) that supposedly defines your chance of success.

So, if you spent years of your life preparing and researching, and poured every ounce of your effort into opening a restaurant, do you really think your chances of failure would be 80 percent?